just a year ago this month, i met with president assad in damascus and I questioned him about the slaughter of his people. Since then, 40,000 people have been killed. Well, today, president obama had some big news. For the first time, he is putting the syrian opposition on the path to be recognized as the assad falls. I'd like to talk about syria. Do you plan to recognize the opposition and give them some legitimacy? We've made a decision that the syrian opposition coalition is now inclusive enough, is reflective and representative enough of the syrian population, that we consider them the legitimate representative of the syrian people, in opposition to the assad regime, and so we will provide them recognition and obviously with that recognition comes the responsibilities on the part of that coalition. Reporter: That's a big step. It is a big step. There is a small element of those who oppose the assad regime that are, in fact, affiliated with al qaeda in iraq. And we have designated them as a terrorist organization. And we are going to make clear to distinguish between those elements of the opposition. Reporter: For the president, recognizing the syrian opposition as the legitimate authority in that country, many are asking what this may mean in terms of u.S. Involvement. But today, a senior administration official said that there is still no plan to arm this group. Yet, the government hasn't ruled it out. Meanwhile, the other issue on the forefront of the president's mind today -- the u.S. Economy and that pending fiscal cliff. Are we going to go over the fiscal cliff? You know, I remain optimistic that there are enough people of good will in this town that recognize our economy will be much better off, american families will be much better off, if we get this done. The most important thing we can do is make sure the middle class taxes do not go up january 1st and I'm pretty confident that republicans would not hold middle class taxes hostage to try to protect tax cuts for high income individuals. Reporter: Prediction. Are you going to be able to raise taxes? Yes or no? Taxes are going to go up one way or another. Reporter: Oh, are they? And I think the key is to make sure the taxes go up on high end individuals like you and me, barbara. We can afford it. It is entirely possible for us to come up with a deal. But time is running short. Reporter: The president sounded optimistic about avoiding the fiscal cliff. He said if his meeting with speaker boehner, "i think the tone was good, I believe both speaker boehner and myself and the other leaders want to see a deal happen." But then, he did warn that the clock is ticking. It is for sure. And I know you're going to have more of this interview, we'll all be catching, tomorrow morning on "gma," tonight on "nightline" and the full interview with the president and with mrs. Obama will be airing on a special edition of "20/20" on friday ni

This transcript has been automatically generated and may not be 100% accurate.

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